He explained that the company was poor in the case of demand also continued to produce

mainly because of increasing competition in the labor context, some companies will not dare to stop work after a work stoppage is difficult in a short time and then hire workers, so some companies could do nothing but increase the stock, but this approach can only be a temporary policy, corporate financial pressure will therefore increase.

    It is understood that some companies have started to adjust production capacity to minimize the financial pressure. According to En-column introduction, the company had more than 1,000 looms, and now only started more than 100, around a number of small businesses and some have been completely suspended. 

    Meanwhile, cotton, yarn and raw material cost increases are squeezing corporate profits. Shandong Province, Department of Finance data show that 1-2 months of this year, textile enterprises in Shandong Province margin was 5.19% over the same period last year, down 0.32 percentage points, compared with 2010 annual average levels decreased by 0.3 percentage points.

    Li Chuanbo that increased labor costs, the appreciation of the RMB has reduced the profits of an enterprise, in the present state of the cotton price volatility, small businesses will face greater operational risks, and if such a "valuable free city" status longer be sustained, the industry, "shuffle" will become more apparent.

    "High Cotton" era will continue?

    Many in the industry believe that the current weak state of the textile industry that shrinkage, is likely to continue. As cotton production last year to reduce the overall demand in the state, the status of running high cotton prices likely to continue into July and August.
    Press survey found that, at present there are still many many family farmers keep cotton, they're unwilling to sell because of higher cotton prices are still expected. Second shilipu Shandong Gaotang village ten miles Pu Xiang Wang Jinshun said that currently one third of the cotton at home did not sell well this year, more than 30% cotton cut again if not better price, year after a futile trip.
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    According to Tang Maoyong estimated that last year's output and the current price, still can not keep up in cotton yield in cotton grain yield. Under normal years, seed cotton yield by 180 kg per acre basis, the price of 11 yuan is only maintained to ensure farmers benefit.

    The current 12 yuan per kg seed cotton procurement price has increased this year, the enthusiasm of farmers planting. China Cotton Information Network by the end of February of this year, Hebei, Shandong, Henan and other 13 provinces, a sample survey of households showed that the country is expected the annual planting area of ??2011 mu 8182, an increase of survey data in 2010 480 million mu, an increase of 6%.

    But for this year's cotton supply and demand, many people in the industry is not very optimistic. U.S. Department of Agriculture recently announced the next decade the U.S. upland cotton production and demand planning shows that cotton production in 2011/12 than in the United States grew by 7.7% the previous year, but due to stock compensation and other factors, but will reduce exports 1.80% , which imports account for about 40% of global imports for China, not a "good."